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* AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 22, 1994. *
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REGISTRATION NO. 33-
===============================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE CINCINNATI GAS & ELECTRIC COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 31-0240030
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
139 EAST FOURTH STREET
CINCINNATI, OHIO 45202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-381-2000
------------------------
DONALD R. BLUM, SECRETARY
139 EAST FOURTH STREET
CINCINNATI, OHIO 45202
(NAME AND ADDRESS OF AGENT FOR SERVICE)
AGENT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-287-2360
------------------------
COPIES OF ALL COMMUNICATIONS TO:
RONAL R. NEWBANKS
TAFT, STETTINIUS & HOLLISTER
STAR BANK CENTER
CINCINNATI, OHIO 45202
(COUNSEL FOR THE REGISTRANT)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
------------------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. /X/
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING BOX. / /
------------------------
CALCULATION OF REGISTRATION FEE
===============================================================================================
<CAPTION>
<S> <C> <C> <C> <C>
PROPOSED PROPOSED
TITLE OF EACH AMOUNT MAXIMUM MAXIMUM AMOUNT OF
CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
- - -----------------------------------------------------------------------------------------------
Common Stock,
$8.50 Par Value........ 1,000,000 shs. $22.4375 $22,437,500 $7,737.07
<FN>
===============================================================================================
(1) Based on average high and low stock prices on July 15, 1994 and used solely
for the purpose of calculating the registration fee.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
CONSTITUTING A PART OF THIS REGISTRATION STATEMENT ALSO RELATES TO THE REMAINING
193,296 SHARES OF THE 2,000,0000 SHARES OF THE REGISTRANT'S COMMON STOCK, SUCH
SHARES HAVING BEEN REGISTERED PURSUANT TO ITS DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN UNDER THE SECURITIES ACT OF 1933 BY REGISTRATION STATEMENT NO.
33-38396.
===============================================================================================
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PROSPECTUS
THE CINCINNATI GAS & ELECTRIC COMPANY
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
COMMON STOCK
($8.50 PAR VALUE)
------------------
The Dividend Reinvestment and Stock Purchase Plan (the Plan) of The
Cincinnati Gas & Electric Company provides a simple and convenient method for
the holders of shares of the Company's Common Stock and all series of Cumulative
Preferred Stock to purchase shares of the Company's Common Stock without payment
of a brokerage commission or service charge.
Participants in the Plan may:
--have dividends on their shares automatically reinvested;
--have an amount less than their full dividends on certificated shares
automatically reinvested and receive the remainder of their dividends in
cash;
--continue to receive dividends on certificated shares registered in their
names and invest by making optional cash payments of not less than $25
for any dividend payment date and not more than $40,000 in any calendar
year;
--invest both cash dividends and optional cash payments;
--deposit their certificates of Common Stock with the Plan;
--direct the Company to transfer, at no cost to the participants, all or a
portion of their whole shares of Common Stock to other persons.
The purchase price of the shares of Common Stock will be the average of the
high and low prices (New York Stock Exchange--Composite) on any dividend payment
date (if no trading is reported for that date, on the preceding day on which
there was trading).
This Prospectus relates to 1,193,296 authorized and unissued shares of the
Company's Common Stock registered for purchase under the Plan. It is suggested
that this Prospectus be retained for future reference.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
July 22, 1994
<PAGE> 3
AVAILABLE INFORMATION
THE CINCINNATI GAS & ELECTRIC COMPANY (CG&E) IS SUBJECT TO THE
INFORMATIONAL REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934 (EXCHANGE ACT)
AND ACCORDINGLY FILES REPORTS AND OTHER INFORMATION WITH THE SECURITIES AND
EXCHANGE COMMISSION. INFORMATION CONCERNING DIRECTORS AND OFFICERS, THEIR
REMUNERATION, AND ANY MATERIAL INTEREST OF SUCH PERSONS IN TRANSACTIONS WITH
CG&E, AS OF PARTICULAR DATES, IS DISCLOSED IN PROXY STATEMENTS DISTRIBUTED TO
CG&E'S SHAREHOLDERS AND FILED WITH THE COMMISSION. SUCH REPORTS, PROXY
STATEMENTS, AND OTHER INFORMATION CAN BE INSPECTED AND COPIED AT THE PUBLIC
REFERENCE FACILITIES MAINTAINED BY THE COMMISSION AT ROOM 1024, 450 FIFTH
STREET, N.W., WASHINGTON, D.C.; SUITE 1400, CITICORP CENTER, 500 WEST MADISON
STREET, CHICAGO, ILLINOIS; AND SEVEN WORLD TRADE CENTER, 13TH FLOOR, NEW YORK,
N.Y. COPIES OF SUCH MATERIAL CAN ALSO BE OBTAINED AT PRESCRIBED RATES FROM THE
PUBLIC REFERENCE SECTION OF THE COMMISSION AT ITS PRINCIPAL OFFICE AT 450 FIFTH
STREET, N.W., WASHINGTON, D.C. 20549. SUCH MATERIAL CAN ALSO BE INSPECTED AT THE
OFFICES OF THE NEW YORK STOCK EXCHANGE, THE CHICAGO STOCK EXCHANGE, THE PACIFIC
STOCK EXCHANGE, AND THE CINCINNATI STOCK EXCHANGE.
CG&E'S PRINCIPAL EXECUTIVE AND BUSINESS OFFICE IS LOCATED AT 139 EAST
FOURTH STREET, CINCINNATI, OHIO 45202-4003 (TELEPHONE 513-381-2000).
------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES OFFERED
BY THIS PROSPECTUS OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CG&E SINCE THE
DATE HEREOF, OR THAT THE INFORMATION HEREIN CONTAINED OR INCORPORATED BY
REFERENCE HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There are hereby incorporated in this Prospectus by reference the following
documents heretofore filed with the Securities and Exchange Commission:
1. CG&E's Annual Report on Form 10-K for the year ended December 31,
1993, filed pursuant to the Exchange Act.
2. CG&E's Quarterly Report on Form 10-Q for the quarter ended March
31, 1994, filed pursuant to the Exchange Act.
3. CG&E's Current Report on Form 8-K dated June 15, 1994, filed
pursuant to the Exchange Act.
All documents filed by CG&E pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the shares of Common Stock shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents.
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Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
CG&E HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A
COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH
HAVE BEEN OR MAY BE INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE
CINCINNATI GAS & ELECTRIC COMPANY, ATTENTION: DONALD R. BLUM, SECRETARY, 139
EAST FOURTH STREET, CINCINNATI, OHIO 45202-4003 (TELEPHONE 513-381-2000).
---------------
THE COMPANY
CG&E (incorporated in Ohio in 1837) and its subsidiaries are primarily
engaged in providing electric and gas service in the southwestern portion of
Ohio and adjacent areas in Kentucky and Indiana. The area served with
electricity or gas, or both, covers approximately 3,000 square miles with an
estimated population of 1.8 million and includes the cities of Cincinnati and
Middletown in Ohio, Covington and Newport in Kentucky, and Lawrenceburg in
Indiana.
---------------
PROPOSED MERGER
CG&E has entered into a merger agreement with PSI Resources, Inc. (PSI) and
PSI Energy, Inc., PSI's principal subsidiary, an Indiana electric utility (PSI
Energy) with a service area contiguous to that of CG&E. Under the merger
agreement, CG&E and PSI will become subsidiaries of a newly formed corporation
named CINergy Corp. (the Merger). CINergy Corp. will be a registered holding
company under the Public Utility Holding Company Act of 1935 (PUHCA). In order
to effect the Merger, each share of CG&E common stock will be converted into one
share of CINergy common stock, and each share of PSI common stock will be
converted into that number of shares of CINergy common stock obtained by
dividing $30.69 by the average closing sale price of CG&E common stock for the
15 consecutive trading days preceding the fifth trading day prior to
consummation of the Merger, provided that the number of shares of CINergy stock
to be exchanged for each share of PSI will be no greater than 1.023 and no less
than .909. At March 31, 1994, CG&E and PSI had 88.5 million and 57.2 million
common shares outstanding, respectively. The Merger will be accounted for as a
"pooling-of-interests", and will be tax-free for shareholders.
The Merger is subject to approval by the Securities and Exchange Commission
(SEC) and the Federal Energy Regulatory Commission (FERC). Shareholders of each
company have already approved the Merger at special meetings held in November
1993.
FERC issued conditional approval of the Merger in August 1993, but several
intervenors, including The Public Utilities Commission of Ohio (PUCO) and the
Kentucky Public Service Commission (KPSC), filed
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for rehearing of that order. On January 12, 1994, FERC withdrew its conditional
approval of the Merger and ordered the setting of FERC-sponsored settlement
procedures to be held.
On March 4, 1994, CG&E reached a settlement agreement with the PUCO and the
Ohio Office of Consumers' Counsel (OCC) on merger issues identified by FERC. On
March 2, PSI Energy and Indiana's consumer representatives had reached a similar
agreement. Both settlement agreements have been filed with FERC. These documents
address, among other things, the coordination of state and federal regulation
and the commitment that neither CG&E nor PSI electric base rates, nor CG&E's gas
base rates, will rise because of the Merger, except to reflect any effects that
may result from the divestiture of CG&E's gas operations if ordered by the SEC
in accordance with the requirements of PUHCA discussed below.
CG&E also filed with FERC a unilateral offer of settlement addressing all
issues raised in the KPSC's application for rehearing with FERC. The settlement
offer commits CG&E's Kentucky subsidiary, the Union Light, Heat and Power
Company (Union Light), among other things, to "hold harmless" its retail gas
customers from the effects of the Merger on Union Light's retail gas base rates
that become effective on or after the date of the Merger and prior to January 1,
2003. However, Union Light's offer will not apply to any effects that may result
from the divestiture of Union Light's gas operations, discussed below.
Although it is the belief of CG&E and PSI that no state utility commissions
have jurisdiction over approval of the proposed Merger, an application was filed
with the KPSC to comply with the Staff of the KPSC's position that the KPSC's
authorization is required for the indirect acquisition of control of Union Light
by CINergy. A hearing on the KPSC application was held on May 10, 1994. In
testimony filed in the hearing, CG&E and Union Light made, in addition to other
commitments, an offer to the KPSC that Union Light would also "hold harmless"
retail electric customers and would agree to an electric rate moratorium
commencing after Union Light's next retail rate case and extending to January 1,
2000. On May 13, 1994, the KPSC issued an order approving the Merger, subject to
the condition that CG&E and Union Light must agree that, for 12 months from
consummation of the Merger, no filings will be made to adjust CG&E's base
purchase power rate and Union Light's base electric rates. On May 19, 1994,
CINergy, CG&E and Union Light submitted letters to the KPSC accepting the
commitments and condition set forth in its May 13, 1994 order approving the
Merger.
Also included in the filings with FERC were settlement agreements with the
city of Hamilton, Ohio, and the Wabash Valley Power Association in Indiana.
These agreements resolve issues related to the transmission of power in Ohio and
Indiana.
On April 7, 1994, CG&E and the City of Cincinnati reached settlement in
support of the Merger and filed a Joint Stipulation and Agreement with FERC.
CG&E has guaranteed, among other things, that its electric retail customer rates
will not rise because of the Merger and the City has agreed to support the
Merger and CG&E's efforts to retain its gas operations before the SEC.
The 30-day period for commenting on settlements and agreements filed with
FERC ended on April 21, 1994. During that period, the FERC trial staff filed
comments with the commission recommending that FERC approve the settlements.
However, the Merger is still being opposed by various other parties. If the
settlement agreements are not acceptable, FERC could set issues for hearing.
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CG&E and PSI also submitted to FERC the operating agreement among CINergy
Services, Inc., a subsidiary of CINergy, and CG&E and PSI Energy that provides
for the coordinated planning and operation of the electric generation and
transmission and other facilities of CG&E and PSI as an integrated utility
system. It also establishes a framework for the equitable sharing of the
benefits and costs of such coordinated operations between CG&E and PSI. The
parties to the Ohio and Indiana FERC settlements have agreed to support or not
oppose the operating agreement, and the settlements are conditioned upon FERC
approving the filed operating agreement without material changes.
CG&E's filing with FERC also references a separate agreement among CG&E,
the Staff of the PUCO, the OCC, and other parties settling issues raised by a
November 1993 ruling of the Supreme Court of Ohio on the phased-in electric rate
increase ordered by the PUCO in May 1992. The agreement includes a moratorium on
increases in base electric rates prior to January 1, 1999 (except under certain
circumstances), authorization for CG&E to retain all non-fuel merger savings
until 1999, and a commitment by the PUCO that it will support CG&E's efforts to
retain CG&E's gas operations in its PUHCA filing with the SEC (see below). The
PUCO approved this separate agreement on April 14, 1994. Reference is made to
"Rate Matters" for additional information.
On May 23, 1994, CINergy filed an application seeking approval by the SEC
under PUHCA of the acquisition by CINergy of the common stock of CG&E and PSI
Energy. PUHCA imposes restrictions on the operations of registered holding
company systems. Among these are requirements that securities issuances, sales
and acquisitions of utility assets or of securities of utility companies and
acquisitions of interests in any other business be approved by the SEC. PUHCA
also limits the ability of registered holding companies to engage in non-utility
ventures and regulates the rendering of services by holding company affiliates
to the system's utilities. PUHCA has been interpreted to preclude the ownership
of both electric and gas utility systems. As a result, the SEC may require
divestiture of the Company's gas properties within a reasonable time after the
Merger. CG&E believes good arguments exist to allow retention of its gas assets
and will request that it be allowed to do so.
Intervention papers and hearing requests were filed by a number of parties
during the period allowed by the SEC, which ended on July 1, 1994. Three of the
filings raise a number of objections to the Merger and request that the Merger
be disapproved or that approval be subject to a number of conditions, including,
among other things, divestiture of the gas assets. The Company intends to
respond vigorously to the arguments raised in the intervention papers and
believes that good arguments exist in support of CINergy's request for
authorization to retain the gas assets; however, the outcome of the proceedings
cannot be predicted.
Originally, the merger agreement provided that CG&E and PSI would be merged
into CINergy as an Ohio corporation. Under this structure CG&E and PSI would
have become operating divisions of CINergy, ceasing to exist as separate
corporations, and CINergy would not have been subject to the restrictions
imposed by PUHCA. However, The Indiana Utility Regulatory Commission (IURC)
dismissed PSI's application for approval of the transfer of its license or
property to a non-Indiana corporation. The IURC's decision has been appealed and
the original merger structure could be reinstated if the appeal is successful.
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DIVIDEND REINVESTMENT AND STOCK
PURCHASE PLAN
FREQUENTLY USED TERMS
AUTHORIZATION FORM: Application for Plan participation for shareholders
holding certificated Shares.
CERTIFICATE DEPOSIT FORM: Document available from the Company which
authorizes deposit of Common Stock certificates into a Plan account.
CERTIFICATE HOLDERS: Shareholders who own shares and hold certificates of
CG&E stock in their names.
CERTIFICATED SHARES: Shares for which participants hold certificates
registered in their names.
PLAN SHARES: Shares held in book entry form by the Company for Plan
participants.
RECORD DATE: Generally 15 to 18 days prior to the dividend payment date
for Common Stock, and generally 30 days prior to the dividend payment date for
Preferred Stock.
STOCK POWER: Form of assignment of shares separate from the stock
certificate. Document authorizing transfer of ownership.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is, among other things, to encourage long-term
investment by providing holders of CG&E's Common and Preferred Stock with a
simple and convenient method of investing cash dividends and optional cash
payments in shares of Common Stock at a price equal to market value, without
payment of any brokerage commission or service charge.
ADVANTAGES
2. WHAT ARE THE ADVANTAGES OF THE PLAN?
Participants in the Plan may:
--have dividends on their shares automatically reinvested;
--have an amount less than their full dividends on Certificated Shares
automatically reinvested and receive the remainder of their
dividends in cash;
--continue to receive dividends on Certificated Shares and invest by
making optional cash payments of not less than $25 for any dividend
payment date and not more than $40,000 in any calendar year;
--invest both cash dividends and optional cash payments;
--deposit their certificates of Common Stock with the Plan;
--direct the Company to transfer to other persons, at no cost to the
participants, all or a portion of their whole shares of Common Stock
held in the Plan.
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No commission or service charge is paid by participants in connection with
purchases under the Plan. Full investment of funds is possible under the Plan
because fractional shares, as well as whole shares, will be credited to
participants' accounts. Dividends on such fractional shares, as well as on whole
shares, will also be credited to their accounts. CG&E assures safekeeping of
shares in participants' accounts because certificates are not issued unless
requested. This feature protects against loss, theft, and destruction of the
certificates. Regular statements of accounts provide simplified recordkeeping.
ADMINISTRATION
3. WHO ADMINISTERS THE PLAN?
CG&E administers the Plan for participants, keeps records, sends statements
of accounts to participants, and performs other duties relating to the Plan.
PARTICIPATION
4. WHO IS ELIGIBLE TO PARTICIPATE?
All holders of record of CG&E's Common and Preferred Stock are eligible to
participate in the Plan provided that the requirements of participation as
outlined in Question 5 are met.
Upon compliance with CG&E's requirements, Brokers may participate on behalf
of their customers, in which case please note: PARTICIPATION IN THE PLAN THROUGH
BROKERS MAY BE ON TERMS AND CONDITIONS WHICH DIFFER FROM THOSE SET FORTH IN THIS
PROSPECTUS, IN WHICH CASE THE TERMS AND CONDITIONS SET BY EACH BROKER SHALL
GOVERN.
5. HOW DOES A CERTIFICATE HOLDER BECOME A PARTICIPANT?
A Certificate Holder may join the Plan by signing an Authorization Form for
each account and returning it to CG&E. An Authorization Form may be obtained
from CG&E at the address or at the telephone number shown under Question 44.
Unless otherwise directed in writing, dividends payable on any additional shares
acquired by participants under the same registration will be automatically
reinvested.
6. WHAT DOES THE AUTHORIZATION FORM PROVIDE?
The Authorization Form allows Certificate Holders to decide the manner of
their participation in the Plan. By checking the appropriate box on the
Authorization Form, they may indicate a choice of: (1) reinvesting all dividends
paid on Certificated Shares of Common and Preferred Stock, and/or making any
optional cash payments; or (2) having an amount less than their full dividends
automatically reinvested and receiving the remainder of their dividends in cash,
and/or making any optional cash payments; or (3) participating in the Plan by
making optional cash payments only. Dividends on Plan Shares will be
automatically reinvested in additional shares of Common Stock.
7. MAY CERTIFICATE HOLDERS HAVE DIVIDENDS REINVESTED UNDER THE PLAN WITH
RESPECT TO LESS THAN ALL OF THE SHARES REGISTERED IN THEIR ACCOUNTS?
Yes. Certificate Holders may specify the number of shares to be reinvested
and receive a cash dividend for the balance. If a shareholder's balance of
Certificated Shares for reinvestment participation is less than the
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number of shares indicated on the Authorization Form, all dividends on
Certificated Shares will be reinvested. It should be remembered that dividends
on all Plan Shares will be reinvested.
8. MAY A PARTICIPATING CERTIFICATE HOLDER CHANGE THE METHOD OF
PARTICIPATION AFTER ENROLLMENT?
Yes. A participating Certificate Holder may change the method of
participation at any time by completing a new Authorization Form and returning
it to CG&E as indicated under Question 5. In order to change the number of
shares being reinvested through partial participation, as discussed under
Question 7, a participant should notify CG&E in writing not later than 30
calendar days prior to the dividend payment date on which the change is to
become effective.
COSTS
9. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH PURCHASES
UNDER THE PLAN?
No. There are no brokerage or other fees. All costs of administration of
the Plan are paid by CG&E; however, charges will be incurred by participants who
direct CG&E to sell their shares on withdrawal. Persons participating through
Brokers may be required by their Brokers to pay a fee.
PURCHASES
10. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR A PARTICIPANT?
The number of shares to be purchased will be based on the amount of the
participant's dividends being reinvested and the price of the shares of Common
Stock. Each participant's account will be credited with that number of shares,
including fractions computed to four decimal places, equal to the total amount
to be invested divided by the purchase price as determined under Question 12.
The number of shares purchased with optional cash payments will be determined in
the same manner.
The manner in which the Plan operates does not permit CG&E to honor a
request that a specific number of shares be purchased.
11. WHEN WILL DIVIDENDS BE REINVESTED AND OPTIONAL CASH PAYMENTS INVESTED
UNDER THE PLAN FOR THE PURCHASE OF COMMON STOCK?
(a) A participant's initial dividend will be reinvested on the next
dividend payment date after CG&E receives the Authorization Form,
provided the Form is received not later than five calendar days prior
to a Record Date. Otherwise, reinvestment will begin on the next
dividend payment date. Subsequent dividends will be reinvested on
dividend payment dates.
(b) Optional cash payments will be invested on the next dividend payment
date for Common or Preferred Stock (generally every 45 calendar days,
i.e., January 1, February 15, April 1, May 15, July 1, August 15,
October 1, and November 15).
The dividend payment dates for Common Stock are ordinarily the 15th day of
February, May, August, and November.
The dividend payment dates for Preferred Stock are ordinarily the 1st day
of January, April, July, and October.
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12. WHAT WILL BE THE PRICE OF SHARES OF COMMON STOCK PURCHASED UNDER THE
PLAN?
The price of shares of Common Stock purchased for participants in the Plan
will be the average of the high and low prices (New York Stock
Exchange--Composite) for such shares on the dividend payment date (if no trading
is reported for that date, on the preceding day on which there was trading).
CG&E will not issue shares to the Plan at less than the par value of such
shares. If the price of shares to be purchased on any dividend payment date is
less than the par value of the shares, all dividends and optional cash payments
which would have been invested on that date will be sent to the participants.
OPTIONAL CASH PAYMENTS
13. HOW DOES THE OPTIONAL CASH PAYMENT FEATURE WORK?
Optional cash payments received by CG&E on or before a dividend payment
date for Common or Preferred Stock will be applied to the purchase of shares of
Common Stock as of that dividend payment date. NO INTEREST WILL BE PAID ON CASH
PAYMENTS. THEREFORE, IT IS SUGGESTED THAT ANY CASH PAYMENTS BE SENT TO CG&E NOT
MORE THAN 30 DAYS BEFORE A DIVIDEND PAYMENT DATE (see Question 11 for dividend
payment dates).
Optional cash payments cannot be less than $25 for any dividend payment
date or more than $40,000 in any calendar year. The amount of optional cash
payments may vary.
14. HOW ARE OPTIONAL CASH PAYMENTS MADE?
An optional cash payment may be made by enclosing a check (made payable to
CG&E) with the Authorization Form when enrolling or at any other time by
forwarding a check with a statement of account stub, which is furnished to
participants by CG&E.
15. MAY AN OPTIONAL CASH PAYMENT BE RETURNED?
A participant may, without withdrawing from the Plan, request the return of
an optional cash payment upon written notice received by CG&E not later than
three business days prior to the dividend payment date on which the investment
would have been made.
For purposes of the Plan, a "business day" is a day on which the New York
Stock Exchange is open.
16. CAN A PARTICIPANT ORDER THE PURCHASE OF A SPECIFIC NUMBER OF SHARES
WHEN SUBMITTING AN OPTIONAL CASH PAYMENT?
No. All optional cash payments received on or before a dividend payment
date are used to purchase whole and fractional shares on the dividend payment
date at a price determined on the dividend payment date. The amount of cash
necessary to purchase a specific number of shares cannot be determined because
the optional cash payment must be received before the purchase price is known.
17. MAY THE COMPANY RESTRICT PARTICIPATION IN THE PLAN?
Yes. The Company reserves the right to restrict participation in the Plan
if it determines, in its sole discretion, that the person is investing, or
intends to invest, in the Plan in a manner contrary to applicable law or the
general purpose of the Plan.
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REPORTS TO PARTICIPANTS
18. WHAT REPORTS WILL BE SENT TO PARTICIPANTS IN THE PLAN?
Participants in the Plan will receive statements of accounts as soon as
practicable after each dividend payment date on which investments are made for
their accounts. These statements are a participant's record of the cost of
purchases and should be retained for income tax purposes. The last statement for
the year will indicate the number of shares of Common Stock reinvested during
the calendar year, the date of each reinvestment, and the fair market value of
the stock on the date reinvested. In addition, each participant will receive
copies of the same communications sent to all holders of shares of Common Stock,
including CG&E's quarterly reports to shareholders, the Annual Report, the
Notice of Annual Meeting and Proxy Statement, and information to use for
Internal Revenue Service reporting.
DIVIDENDS
19. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON FRACTIONAL SHARES?
Yes. Such dividends will be computed to four decimal places.
20. WILL DIVIDENDS ON PLAN SHARES BE REINVESTED?
Yes. Dividends on all Plan Shares will automatically be reinvested in
additional Common Stock, even if the participant checked the "Optional Cash
Payments Only" box on the Authorization Form. If participants desire to receive
a dividend check, shares must be withdrawn from the Plan in certificate form and
the method of participation may need to be changed.
CERTIFICATES FOR SHARES
21. WILL CERTIFICATES FOR SHARES OF COMMON STOCK PURCHASED UNDER THE PLAN
BE ISSUED TO PARTICIPANTS WHO WISH TO REMAIN IN THE PLAN?
Certificated Shares will not be issued to participants unless requested.
Shares of Common Stock purchased under the Plan will be registered in the name
of CG&E (or its nominee). The number of Plan Shares will be shown on the
statement of account mailed to each participant.
Certificates for any number of whole shares credited to an account under
the Plan will be issued upon the written request of a participant who wishes to
remain in the Plan. This request should be mailed to CG&E at the address shown
under Question 44. Any remaining whole and fractional shares held by CG&E for
the account of the participant will continue to participate in the Plan. No
certificates can be issued for fractional shares.
Plan Shares may not be pledged.
22. IN WHOSE NAME WILL ACCOUNTS BE MAINTAINED AND CERTIFICATES REGISTERED
WHEN ISSUED?
Accounts under the Plan will be maintained in the names in which
certificates of the participants were registered at the time they entered the
Plan. Certificates for whole shares, when issued, will be similarly registered.
10
<PAGE> 12
WITHDRAWAL AND TERMINATION
23. MAY A PARTICIPANT, WITHOUT WITHDRAWING FROM THE PLAN, DISCONTINUE
REINVESTMENT OF DIVIDENDS?
Yes. Without withdrawing from the Plan, a participant may discontinue
reinvestment of dividends on Certificated Shares by giving CG&E written notice
not later than four business days prior to a Record Date. A form is provided on
the reverse of the statement of account.
24. WHAT HAPPENS WHEN A PARTICIPANT WITHDRAWS SHARES FROM THE PLAN?
A participant may withdraw shares by submitting to CG&E the Account Change
Request located on the reverse of the statement of account or by notifying CG&E
in writing, requesting CG&E to:
(a) Issue stock certificate for all whole Plan Shares (fractional shares
will remain in the Plan); or
(b) Issue stock certificate for a specific number of whole Plan Shares; or
(c) Sell a specific number of whole Plan Shares.
25. WHAT HAPPENS WHEN A PARTICIPANT CHOOSES TO TERMINATE PLAN
PARTICIPATION?
A participant may terminate by submitting to CG&E the Account Change
Request located on the reverse of the statement of account or by notifying CG&E
in writing, requesting CG&E to:
(a) Close the Plan account and issue a stock certificate for all whole Plan
Shares, sell fractional share; or
(b) Close the Plan account and sell all whole and fractional Plan Shares.
26. HOW DOES CG&E PROCESS REQUESTS FOR WITHDRAWALS AND TERMINATIONS?
Withdrawals and terminations will normally be processed within five
business days following CG&E's receipt of a request. Proceeds from any sale,
less applicable brokerage commissions, will be remitted to a participant
following settlement through a broker, normally five business days after the
sale. Any request for termination from the Plan or sale of Plan Shares received
after an ex-dividend date (four business days prior to a Record Date),
pertaining to dividends on Common Stock, will not be processed until after the
dividends declared as of that Record Date have been reinvested.
27. HOW DOES CG&E DETERMINE THE SALE PRICE FOR WITHDRAWALS AND
TERMINATIONS?
The sale price for shares sold through withdrawal or termination is the
market price of CG&E's Common Stock at the time of sale.
28. WHEN MAY A PERSON REJOIN THE PLAN?
Generally, a person may rejoin at any time. However, CG&E reserves the
right to reject any Authorization Form from a previous participant on grounds of
excessive termination and rejoining. Such reservation is intended to minimize
administrative expense and to encourage use of the Plan as a long-term
investment service.
11
<PAGE> 13
SAFEKEEPING SERVICE FOR COMMON STOCK CERTIFICATES
29. WHAT IS THE PURPOSE OF THE PLAN'S SAFEKEEPING SERVICE FOR CERTIFICATES
AND HOW DOES IT WORK?
The purpose of the Plan's Safekeeping Service is to permit participants in
the Plan to deposit Common Stock certificates with the Plan. Shares deposited
for safekeeping will be transferred into the name of the Plan's nominee and
credited to the participant's account under the Plan. Thereafter, the shares
will be treated in the same manner as shares purchased through the Plan.
30. WHAT ARE THE ADVANTAGES OF THE PLAN'S SAFEKEEPING SERVICE?
The Plan's Safekeeping Service offers two significant advantages to
participants. First, the risk associated with loss of a participant's Common
Stock certificates is eliminated. Second, because shares deposited with the Plan
for safekeeping are treated in the same manner as shares purchased through the
Plan, they may be sold through the Plan in a convenient and efficient manner,
provided they have been deposited for at least 60 days.
31. HOW MAY COMMON STOCK CERTIFICATES BE DEPOSITED WITH THE PLAN?
Participants who wish to deposit their certificates of Common Stock with
the Plan must complete and return to the Company a Certificate Deposit Form
together with Common Stock certificates registered in their names. Certificates
for Preferred Stock will not be accepted for safekeeping.
32. WHAT HAPPENS TO DIVIDENDS PAID ON SHARES OF COMMON STOCK DEPOSITED WITH
THE PLAN?
Dividends paid on shares of Common Stock deposited with the Plan will
automatically be reinvested in additional shares of Common Stock.
TRANSFER OF SHARES
33. MAY PARTICIPANTS ASSIGN OR TRANSFER ALL OR A PART OF THEIR PLAN SHARES?
Yes. If participants wish to change the ownership of all or part of their
Plan Shares through gift, private sale, or otherwise, they may effect transfer
by mailing a properly executed Stock Power, along with a letter of instruction,
to CG&E at the address shown under Question 44. Transfer of less than all of a
participant's shares must be made in whole share amounts. A request for transfer
is subject to the same requirements applicable to the transfer of Common Stock
certificates, including but not limited to the requirement of a signature
guarantee on the Stock Power. The Company will provide the participant with a
form of Stock Power upon request.
34. IF PLAN SHARES ARE TRANSFERRED TO ANOTHER PERSON, WILL THE COMPANY
ISSUE A STOCK CERTIFICATE TO THE TRANSFEREE?
Not unless requested. A shareholder account will be opened in the name of
the person to whom the shares are transferred. An Authorization Form and
prospectus will be mailed to the new shareholder.
35. HOW WILL THE NEW SHAREHOLDER BE ADVISED OF THE TRANSFER?
The Company will provide a confirmation of transfer to the participant who
requested the transfer. After reinvestment of the first dividend, the new
shareholder will receive a statement showing the number of shares transferred.
12
<PAGE> 14
OTHER INFORMATION
36. IF CG&E HAS A RIGHTS OFFERING, HOW WILL THE RIGHTS ON PLAN SHARES BE
HANDLED?
Warrants representing rights on any shares of Common Stock, both full and
fractional, credited to the account of a participant will be mailed directly to
the participant in the same manner as to shareholders not participating in the
Plan.
37. WHAT HAPPENS IF CG&E ISSUES A STOCK DIVIDEND OR DECLARES A STOCK SPLIT?
Any shares of Common Stock distributed as a result of a stock dividend or
stock split on Plan Shares will be added to the participant's account. Stock
dividends or split shares distributed on any Certificated Shares registered in
the name of the participant will be mailed to the participant in the same manner
as to shareholders not participating in the Plan.
38. HOW WILL A PARTICIPANT'S SHARES BE VOTED AT MEETINGS OF SHAREHOLDERS?
Each participant will be sent a proxy card which will include the number of
Plan Shares. Such proxy will be voted in accordance with the instructions of the
participant. If the proxy card is not returned prior to the meeting date or is
returned unsigned, none of the shares will be voted.
39. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE
PLAN?
A participant will be treated for Federal income tax purposes as having
received, on the dividend payment date, dividends equal to the full amount of
the cash dividends payable on both Certificated and Plan Shares.
Participants will not realize any taxable income at the time whole shares
are withdrawn from their accounts under the Plan. However, participants who
receive, on withdrawal from or termination of the Plan, a cash payment for Plan
Shares (as used in this paragraph includes whole and/or fractional shares) may
realize a gain or loss. Gains or losses may also be realized by participants
when whole shares are sold by them after withdrawal from the Plan. The amount of
such gains or losses, if any, will be the difference between the amounts which
participants receive for their shares and their tax basis. Except in the case of
participants who excluded reinvested dividends from taxable income during the
years 1982 through 1985 (see below), the tax basis of shares purchased with
reinvestment dividends will equal the fair market value of such shares on the
dividend payment dates as of which the shares were credited to the participants'
accounts. The tax basis of shares purchased with optional cash payments will be
the amount of such optional cash payments.
During the years 1982 through 1985, participants were eligible to elect to
exclude from taxable income up to $750 of reinvested dividends per year ($1,500
for a joint return). The tax basis of shares purchased with such excluded
dividends is zero for the purpose of determining taxable gain when the shares
are sold. The gain from the sale of those shares qualifies for long-term capital
gain treatment if the shares are held for more than one year from the dividend
payment date on which they were purchased. However, if other shares of CG&E's
Common Stock (regardless of how acquired) are sold between the Record Date of a
dividend which is reinvested and a date 12 months after the payment date of that
dividend, participants shall be treated as having disposed of shares which were
purchased with such dividend (up to the number of shares so purchased) and the
net proceeds from the sale of such shares shall be treated as ordinary income.
For further information as to the tax consequences of participation in the
Plan, participants are advised to consult their tax advisors. The statements of
accounts sent to participants should be retained for this purpose.
13
<PAGE> 15
40. WHAT PROVISION IS MADE FOR FOREIGN SHAREHOLDERS SUBJECT TO INCOME TAX
WITHHOLDING?
In the case of foreign shareholders who elect to have their dividends
reinvested and whose dividends are subject to United States income tax
withholding, the amount of the tax to be withheld will be deducted from the
amount of dividends to be reinvested. The statements confirming purchases made
for foreign participants will indicate the net dividend payment reinvested.
Optional cash payments received from them must be in United States dollars.
41. MAY THE PLAN BE CHANGED OR DISCONTINUED?
CG&E reserves the right to suspend, modify, or terminate the Plan. All
participants will receive notice of any such suspension, modification, or
termination.
42. WHAT HAPPENS UPON CONSUMMATION OF THE MERGER?
Upon consummation of the Merger, as discussed elsewhere in the prospectus,
each participant in this Plan will automatically and without any further action
by them, become a participant in the CINeregy Dividend Reinvestment and Stock
Purchase Plan under substantially the same terms of participation as under this
Plan unless the participant affirmatively communicates, in writing, his or her
desire to be terminated from the Plan, as described in Question 25.
43. WHAT IS THE RESPONSIBILITY OF CG&E UNDER THE PLAN?
CG&E, except to the extent otherwise required under applicable state and
federal securities laws, will not be liable for any action taken or omitted to
be taken in good faith in administering the Plan.
Participants should recognize that CG&E cannot assure them a profit or
protect them against a loss on shares purchased by them under the Plan or
otherwise.
44. WHERE SHOULD CORRESPONDENCE REGARDING THE PLAN BE DIRECTED?
All correspondence regarding the Plan should be addressed to:
The Cincinnati Gas & Electric Company
Shareholder Services
P. O. Box 900
Cincinnati, OH 45201-0900
Telephone inquiries may also be made to CG&E toll free from anywhere in the
United States between 8:00 a.m. and 5:00 p.m. Eastern Time. The numbers are as
follows:
Greater Cincinnati 1-513-287-1940
Toll free 1-800-325-2945
---------------
USE OF PROCEEDS
The net proceeds from the sale of shares of Common Stock, $8.50 Par Value
(the Shares) offered hereby will be used for general corporate purposes,
including additional construction.
---------------
14
<PAGE> 16
DESCRIPTION OF CG&E COMMON STOCK
DIVIDEND RIGHTS
After payment or setting aside for payment of full cumulative dividends on
all outstanding Preferred Stock, Common shareholders are entitled to dividends
at such rate as may be determined by the Board of Directors, subject to the
provisions of the Amended Articles of Incorporation, as amended.
VOTING RIGHTS
Common shareholders are entitled to one vote for each share on all matters
voted upon by shareholders, except that whenever dividends on the Preferred
Stock are in default in an aggregate amount equal to four full quarterly
dividends on all outstanding shares of such Stock, the Preferred shareholders
are entitled, as a class, to elect a majority of the Board of Directors, and the
right continues until all dividends in arrears have been paid or declared and
set apart for payment. On compliance with statutory procedures, Common
shareholders have cumulative voting rights in the election of directors.
LIQUIDATION RIGHTS
Subject to the prior rights of creditors and of Preferred shareholders,
Common shareholders are entitled to receive all assets of CG&E pro rata in the
event of liquidation or dissolution.
PREEMPTIVE RIGHTS
Common and Preferred shareholders have no preemptive rights.
MISCELLANEOUS
The Shares offered hereby upon issuance will be validly issued, fully paid,
and nonassessable.
LISTING
CG&E's Common Stock is listed on the New York, Cincinnati, Chicago, and
Pacific Stock Exchanges.
TRANSFER AGENT AND REGISTRAR
CG&E is transfer agent for its Common Stock, mailing address: Shareholder
Services, P. O. Box 900, Cincinnati, OH 45201-0900. The Registrar is The Fifth
Third Bank, 38 Fountain Square Plaza, Cincinnati, OH 45263, Attention: Corporate
Trust Services.
DESCRIPTION OF CINERGY COMMON STOCK
GENERAL
Upon consummation of the Merger, the authorized capital stock of CINergy
will consist of 600,000,000 shares of CINergy Common Stock. The description of
the CINergy Common Stock set forth herein does not purport to be complete and is
qualified in its entirety by reference to the Certificate of Incorporation and
By-Laws of CINergy.
15
<PAGE> 17
VOTING RIGHTS
The holders of CINergy Common Stock will be entitled to one vote per share
on all matters to be voted upon by shareholders, including elections of
directors. Following the Merger, the Board of Directors of CINergy will consist
of 19 members divided into three classes. The directors of a class will hold
office for a term of three years. CINergy Common Stock shareholders do not have
cumulative voting rights in the election of directors.
DIVIDEND AND LIQUIDATION RIGHTS
The holders of CINergy Common Stock will be entitled to receive dividends
as and when delcared by the Board of Directors of CINergy out of funds legally
available therefor. In the event of a liquidation, dissolution or winding up of
the affairs of CINergy, the holders of CINergy Common Stock will be entitled to
share ratably in any assets remaining after payment in full of all liabilities
of CINergy. Because CINergy will conduct its operations through subsidiaries,
CG&E and PSI Energy among others, the ability of CINergy to pay dividends to
holders of CINergy Common Stock will depend on the ability of CG&E and PSI
Energy, among others, to pay common dividends to CINergy.
- No common dividends can be paid by CG&E if there are dividends in
arrears on CG&E Preferred Stock. The Amended Articles of
Incorporation of CG&E also impose restrictions on the payment of
common dividends, except dividends payable in shares of CG&E Common
Stock, so long as any Cumulative Preferred Stock 4% Series is
outstanding, if the common shareholders' equity is less than 25% of
CG&E's total capitalization. CG&E's Mortgage Indenture provides that
CG&E will not, so long as any series of First Mortgage Bonds issued
prior to 1971 is outstanding, declare any common dividends, except
dividends payable in shares of CG&E Common Stock, or purchase any
shares of CG&E Common Stock, or make any distribution of cash or
property to holders of CG&E Common Stock, by reduction of its
capital stock or otherwise, unless, after giving effect to such
dividend, purchase or distribution, the aggregate of all such
dividends and all amounts applied to such purchases or so
distributed subsequent to June 30, 1948, shall not exceed the net
income available for dividends on its Common Stock subsequent to
June 30, 1948, plus $4,000,000. The ability of CG&E to pay common
dividends has not heretofore been impaired by any such prohibition,
restriction or limitation, nor is it anticipated that any such
prohibition, restriction or limitation will impair the ability of
CG&E to pay common dividends to CINergy after consummation of the
Merger.
- No common dividends can be paid by PSI Energy if there are dividends
in arrears on PSI Energy Preferred Stock. PSI Energy's Mortgage
Indenture (Indenture) provides that, so long as any bonds are
outstanding under the Indenture, PSI Energy shall not declare or pay
cash dividends on shares of its capital stock (other than on PSI
Energy Preferred Stock) except out of its earned surplus or net
profits. In addition, PSI Energy's Amended Articles of Incorporation
limit dividends on common stock to 75% of net income available for
common stock if the ratio of common stock equity to total
capitalization is less than 25%, or to 50% of such net income
available if such ratio is less than 20%. The ability of PSI Energy
to pay common dividends has not heretofore been impaired by any such
prohibition, restriction or limitation, nor is it anticipated that
any such prohibition, restriction or limitation will impair the
ability of PSI Energy to pay common dividends to CINergy after
consummation of the Merger.
16
<PAGE> 18
NO OTHER RIGHTS
The holders of CINergy Common Stock do not have preemptive rights with
respect to the issuance of additional shares of capital stock by CINergy. The
CINergy Common Stock does not contain any redemption provisions or conversion
rights.
CERTAIN ANTI-TAKEOVER PROVISIONS
CINergy's Certificate of Incorporation and By-Laws will, upon consummation
of the Merger, contain certain provisions that may delay or deter a change in
control of CINergy. Such provisions require, among other things, (i) a
classified Board of Directors, with each class containing as nearly as possible
one-third of the whole number of members of the Board and the members of each
class serving for three-year terms, (ii) a vote of at least 80% of CINergy's
voting power to amend certain provisions of CINergy's By-Laws, and (iii) advance
notice procedures with respect to nominations of directors other than by or at
the direction of the CINergy Board.
STATEMENT CONCERNING EXPERTS
The statements made in CG&E's Annual Report on Form 10-K for the year ended
December 31, 1993 under "Regulation", "Rate Matters" and "Environmental
Matters", under "Rate Matters" in CG&E's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1994 (which documents are incorporated in this
Prospectus by reference), and under "Dividend Reinvestment and Stock Purchase
Plan", and "Description of CG&E Common Stock" in this Prospectus, have been
reviewed by Taft, Stettinius & Hollister, counsel for CG&E. The statements
therein as to matters of law and legal conclusions are made on the authority of
that firm as experts. The members and associates of the firm and their immediate
families own directly or indirectly an aggregate of 6,926 shares of CG&E's
Common Stock and 1,940 shares of CG&E's Preferred Stock.
The consolidated balance sheet and schedules of common shareholders' equity
and cumulative preferred shares and long-term debt of CG&E and subsidiaries as
of December 31, 1993 and 1992 and the related consolidated statements of income,
changes in common shareholders' equity, and cash flows and schedule of taxes for
each of the three years in the period ended December 31, 1993, included in
CG&E's Annual Report on Form 10-K for the year ended December 31, 1993, have
been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto, and are incorporated herein by
reference in reliance upon the authority of said firm as experts in accounting
and auditing in giving said report. Reference is made to said report dated
January 24, 1994, which includes an explanatory paragraph with respect to the
changes in the methods of accounting for income taxes, postretirement health
care benefits and postemployment benefits effective January 1, 1993.
The consolidated financial statements and schedules of PSI Resources, Inc.
included in CG&E's Current Report on Form 8-K dated June 15, 1994, have been
audited by Arthur Andersen & Co., independent public accountants, as indicated
in their report with respect thereto, and are incorporated herein by reference
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said report. Reference is made to said report dated February
22, 1994, which includes explanatory paragraphs with respect to changes in the
methods of accounting for income taxes and postretirement benefits effective
January 1, 1993, and to the litigation described in Note 2 to the consolidated
financial statements therein.
17
<PAGE> 19
LEGAL OPINIONS
The legality of the Shares has been passed upon for CG&E by Taft,
Stettinius & Hollister, Star Bank Center, Cincinnati, Ohio 45202.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1701.13(E) of the Ohio Revised Code provides that a corporation may
indemnify or agree to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding whether civil, criminal, administrative, or investigative,
other than an action by or in the right of the corporation, by reason of the
fact that the person is or was a director, officer, employee, or agent of the
corporation, or is or was serving at its request as a director, trustee,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by the person in connection with such action, suit, or proceeding if the person
is determined under the procedure described in the Section to have (a) acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation, and (b) had no reasonable
cause to believe the conduct was unlawful in the case of any criminal action or
proceeding. However, with respect to expenses actually and reasonably incurred
in connection with the defense or settlement of any action or suit by or in the
right of the corporation to procure a judgment in its favor, no indemnification
is to be made (i) in respect of any claim, issue, or matter as to which such
person is adjudged liable for negligence or misconduct in the performance of
such person's duty to the corporation unless, and only to the extent it is
determined by the court upon application that, despite the adjudication of
liability, such person is fairly and reasonably entitled to indemnity for such
expenses as the court deems proper, or (ii) in respect of any action or suit in
which the only liability asserted against a director is in connection with the
alleged making of an unlawful loan, dividend, or distribution of corporate
assets. The Section also provides that such person shall be indemnified against
expenses actually and reasonably incurred by the person to the extent successful
in defense of the actions referred to above, or in defense of any claim, issue,
or matter therein.
CG&E's Regulations contain substantially the same provisions except that
permissive indemnity under the statute is made mandatory as to directors and
officers by the Regulations.
CG&E maintains an insurance policy covering its directors and officers
against certain civil liabilities, including liabilities under the Securities
Act of 1933.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
18
<PAGE> 20
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----------
<S> <C>
Available Information........................................... 2
Incorporation of Certain Documents by Reference................. 2
The Company..................................................... 3
Proposed Merger................................................. 3
Dividend Reinvestment and Stock Purchase Plan
Frequently Used Terms...................................... 6
Purpose.................................................... 6
Advantages................................................. 6
Administration............................................. 7
Participation.............................................. 7
Costs...................................................... 8
Purchases.................................................. 8
Optional Cash Payments..................................... 9
Reports to Participants.................................... 10
Dividends.................................................. 10
Certificates for Shares.................................... 10
Withdrawal and Termination................................. 11
Safekeeping Service for Common Stock Certificates.......... 12
Transfer of Shares......................................... 12
Other Information.......................................... 13
Use of Proceeds................................................. 14
Description of CG&E Common Stock................................ 15
Description of CINergy Common Stock............................. 15
Statement Concerning Experts.................................... 17
Legal Opinions.................................................. 18
Indemnification of Directors and Officers....................... 18
</TABLE>
<PAGE> 21
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
CG&E estimates that expenses to be incurred and borne by it in connection
with the proposed sale of the Common Stock are as follows:
<TABLE>
<CAPTION>
ITEM AMOUNT
- - ------------------------------------------------------------- -------
<S> <C>
Registration Fee............................................. $ 7,737
Listing Fees on Stock Exchanges.............................. 11,000
Printing..................................................... 9,300
Postage...................................................... 5,700
Legal Fees................................................... 5,000
Accounting Fees.............................................. 7,000
Other........................................................ 1,000
-------
Total................................................... $46,737
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to "Indemnification of Directors and Officers" contained
in the Prospectus.
ITEM 16. EXHIBITS.
The following exhibits are filed as part of the Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NO.
----------
<S> <C> <C>
*2 --Amended and Restated Agreement and Plan of Reorganization by and among CG&E,
PSI Resources, Inc., PSI Energy, Inc., CINergy Corp. and CINergy Sub, Inc.,
dated as of December 11, 1992, as amended on July 2, 1993, and as of September
10, 1993 (filed as Annex A to Amendment No. 3 to Registration Statement No.
33-59964 on Form S-4)
4-A --Dividend Reinvestment and Stock Purchase Plan as set forth in full in the
prospectus to which reference is hereby made
*4-B --Copy of Amended Articles of Incorporation of CG&E effective January 24, 1994
(filed as Exhibit 3-A-1 to Form 10-K for the year ended December 31, 1993)
*4-C --Copy of Regulations of CG&E as amended, adopted by shareholders April 16, 1987
(filed as Exhibit 3-B to Form 10-Q for the quarter ended March 31, 1987)
*4-D --Certificate of Incorporation of CINergy Corp. (filed as Annex H to Amendment
No. 3 to Registration Statement No. 33-59964 on Form S-4)
*4-E --By-Laws of CINergy Corp. (filed as Annex I to Amendment No. 3 to Registration
Statement No. 33-59964 on Form S-4)
5 --Opinion of Taft, Stettinius & Hollister as to legality of Common Stock
23-A --Consent of Taft, Stettinius & Hollister (included in their opinion filed as
Exhibit 5)
23-B-1 --Consent of Arthur Andersen & Co., Cincinnati, Ohio (see page II-5)
23-B-2 --Consent of Arthur Andersen & Co., Indianapolis, Indiana (see page II-6)
24-A --Power of Attorney (set forth on page II-3)
</TABLE>
- - ---------------
*The exhibits with an asterisk have been filed with the SEC and are incorporated
herein by reference.
II-1
<PAGE> 22
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 23
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON SIGNING BELOW CONSTITUTES
DONALD R. BLUM, JAMES J. MAYER AND C. ROBERT EVERMAN, AND EACH OF THEM, WITH
FULL POWER TO ACT WITHOUT THE OTHERS, HIS LAWFUL ATTORNEY-IN-FACT AND AGENT,
WITH FULL POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM AND IN HIS NAME, IN
ANY CAPACITY, TO SIGN ANY AMENDMENT TO THIS REGISTRATION STATEMENT, AND TO FILE
THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION
THEREWITH, WITH THE SECURITIES AND EXCHANGE COMMISSION GRANTING UNTO THE
ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM, FULL AUTHORITY TO DO EACH ACT
NECESSARY TO BE DONE, AS FULLY TO ALL PURPOSES AS HE MIGHT DO IN PERSON, HEREBY
RATIFYING ALL THAT THE ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM, OR THEIR OR
HIS SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE
HEREOF.
------------------
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
THE CINCINNATI GAS & ELECTRIC COMPANY, A CORPORATION ORGANIZED AND EXISTING
UNDER THE LAWS OF OHIO, CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT
IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO
DULY AUTHORIZED, ALL IN THE CITY OF CINCINNATI AND STATE OF OHIO ON THE 20TH DAY
OF JULY, 1994.
THE CINCINNATI GAS & ELECTRIC COMPANY
By /s/ JACKSON H. RANDOLPH
-------------------------------------
(JACKSON H. RANDOLPH,
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C> <C>
(I) PRINCIPAL EXECUTIVE OFFICER:
/s/ JACKSON H. RANDOLPH Chairman of the Board, July 20, 1994
- - ------------------------------------------ President and Chief Executive
(JACKSON H. RANDOLPH) Officer
(II) PRINCIPAL FINANCIAL OFFICER:
/s/ C. R. EVERMAN Senior Vice-President -- July 20, 1994
- - ------------------------------------------ Finance and Director
(C. R. EVERMAN)
(III) PRINCIPAL ACCOUNTING OFFICER:
/s/ DANIEL R. HERCHE Controller July 20, 1994
- - ------------------------------------------
(DANIEL R. HERCHE)
</TABLE>
II-3
<PAGE> 24
<TABLE>
<S> <C> <C>
(IV) A MAJORITY OF THE BOARD OF DIRECTORS:
/s/ NEIL A. ARMSTRONG Director July 20, 1994
- - -------------------------------------------------
(NEIL A. ARMSTRONG)
/s/ OLIVER W. BIRCKHEAD Director July 20, 1994
- - -------------------------------------------------
(OLIVER W. BIRCKHEAD)
/s/ CLEMENT L. BUENGER Director July 20, 1994
- - -------------------------------------------------
(CLEMENT L. BUENGER)
/s/ PHILLIP R. COX Director July 20, 1994
- - -------------------------------------------------
(PHILLIP R. COX)
/s/ GEORGE C. JUILFS Director July 20, 1994
- - -------------------------------------------------
(GEORGE C. JUILFS)
/s/ THOMAS E. PETRY Director July 20, 1994
- - -------------------------------------------------
(THOMAS E. PETRY)
Director July 20, 1994
- - -------------------------------------------------
(JANE L. REES)
/s/ JOHN J. SCHIFF, JR. Director July 20, 1994
- - -------------------------------------------------
(JOHN J. SCHIFF, JR.)
Director July 20, 1994
- - -------------------------------------------------
(DUDLEY S. TAFT)
/s/ OLIVER W. WADDELL Director July 20, 1994
- - -------------------------------------------------
(OLIVER W. WADDELL)
</TABLE>
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<PAGE> 25
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated January 24,
1994, included in the Annual Report on Form 10-K for the year ended December 31,
1993 of The Cincinnati Gas & Electric Company, and to all references to our Firm
included in this Registration Statement.
ARTHUR ANDERSEN & CO.
Cincinnati, Ohio,
July 20, 1994.
II-5
<PAGE> 26
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our report dated February 22,
1994, on the consolidated financial statements of PSI Resources, Inc. included
in The Cincinnati Gas & Electric Company's Current Report on Form 8-K dated June
15, 1994, and to all references to our Firm included in this Registration
Statement.
ARTHUR ANDERSEN & CO.
Indianapolis, Indiana,
July 20, 1994.
------------------------------
The consent of Counsel named as experts is included in their opinion being
filed as an Exhibit to the Registration Statement.
II-6
EXHIBIT 5
TAFT, STETTINIUS & HOLLISTER
1800 STAR BANK CENTER
425 WALNUT STREET
CINCINNATI, OH 45202-3957
July 22, 1994
The Cincinnati Gas & Electric Company
139 East Fourth Street
Cincinnati, Ohio 45202
Re: Registration of 2,000,000 Additional
Shares of Common Stock under the
Securities Act of 1933
Dear Sirs:
We are acting as counsel for The Cincinnati Gas
& Electric Company (the "Company") in connection with the
proposed issuance and sale by it of 2,000,000 additional shares
of Common Stock of the Company (the "Shares"), pursuant to its
Dividend Reinvestment and Stock Purchase Plan (the "Plan").
In connection therewith we have examined copies of:
(a) the Registration Statement on Form S-3,
including the documents incorporated therein by
reference (the "Registration Statement"), being
filed by the Company with the Securities and
Exchange Commission (the "Commission") for the
registration of the Shares pursuant to the
Securities Act of 1933, as amended;
(b) the Amended Articles of Incorporation of
the Company, as amended (the "Articles"), and its
Regulations as now in effect;
(c) resolutions relating to the Shares, which
were adopted at a meeting of the Board of Directors
of the Company held on July 20, 1994;
(d) the form of the Certificate for the
Shares;
(e) the Application of the Company filed with
The Public Utilities Commission of Ohio requesting
authorization for the issuance and sale of the
Shares; and
(f) such other opinions, documents, minutes,
corporate records, certificates of public officials,
certificates or representations of officers of the
Company, instruments and matters relating to the
authorization and issuance of the Shares as we have
deemed necessary.
Based upon the foregoing, we are of the opinion that:
(1) the Company has been duly incorporated and
is validly existing in good standing under the laws of the
State of Ohio;
(2) the maximum number of shares of Common
Stock which the Company is authorized to have outstanding is
120,000,000 shares of $8.50 par value per share. We have been
informed by the Company that 89,068,665 shares of Common Stock
were issued and outstanding as of June 30, 1994;
(3) the Board of Directors of the Company has
duly authorized the issuance and sale of the Shares pursuant to
the Plan; and
(4) when:
(i) the Company's Registration
Statement, as it may be amended, shall have been
declared effective by order of the Commission;
(ii) The Public Utilities Commission of
Ohio shall have entered an appropriate order
authorizing the issuance and sale of the Shares; and
(iii) certificates for the Shares, in the
form referred to above, bearing the facsimile
signatures of the proper officers of the Company and
having a facsimile of the seal of the Company
reproduced thereon, shall have been duly
countersigned (which may be in facsimile) by a duly
appointed Transfer Agent and duly registered by a
duly appointed Registrar and the Shares shall have
been sold, paid for and delivered pursuant to the
Plan,
then the Shares will be validly issued, fully paid and
nonassessable, and will be entitled to the applicable rights
and subject to the applicable qualifications, limitations or
restrictions as set forth in the Articles.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement, to the references to us
in the Prospectus comprising a part of the Registration
Statement, to the use of our name under the captions "Statement
Concerning Experts" and "Legal Opinions" in that Prospectus,
and to the incorporation into the Prospectus by reference of
the statements as to matters of law and legal conclusions
reviewed by us and referred to under the caption "Statement
Concerning Experts".
Very truly yours,
/s/ TAFT, STETTINIUS & HOLLISTER
